CORPUS CHRISTI, Texas, Aug 15, 2007 /PRNewswire-FirstCall via COMTEX News Network/ --
Susser Holdings Corporation (Nasdaq: SUSS) today reported that its second quarter 2007 merchandise sales increased 11.8 percent to $105.9 million, versus $94.7 million a year ago. Adjusted EBITDA(1) increased 15.7 percent to $16.7 million, versus $14.4 million in the prior year's second quarter. Net income totaled $6.3 million, up 67 percent versus $3.8 million in the prior year's second quarter. Diluted earnings per share was $0.37, compared with $0.40 in the second quarter of 2006, reflecting an increase in shares outstanding following the company's October 2006 IPO. Total revenues increased 6.7 percent to $692.8 million from $649.2 million in the same quarter of 2006. Gross profit increased 8.2 percent to $64.6 million, compared with $59.7 million in the second quarter of 2006.
"Better-than-expected retail fuel margins and good gains in merchandise sales, both overall and on a same-store basis, drove these strong second quarter results," said Sam L. Susser, Susser Holdings President and Chief Executive Officer.
"Performance from our Laredo Taco Company restaurant business continues to be very strong, and we opened six new kitchens during the quarter. We also continue to see great customer response to the re-brandings of our convenience stores to our own Stripes brand and our fuel islands to the Valero brand, which we completed earlier in the year," Susser said.
New Convenience Store/Wholesale Dealer Site Update
During the second quarter of 2007, Susser opened five new large-format convenience stores and closed one smaller store, growing the total store count at July 1 to 329. The Company recently opened one additional store, for a total of eight new stores to date this year. Seven stores are currently under construction, with three more scheduled to commence during third quarter and one store is under contract to be acquired and remodeled. An estimated 18 to 22 new retail stores are planned for all of 2007, and substantially all are expected to include a Laredo Taco Company restaurant.
In its wholesale operations, the Company added six new dealer sites and discontinued three during the quarter, for a total of 374 dealer sites in operation at the end of the second quarter. Susser has added 12 dealer sites during the first half and expects to add 25 to 35 new dealer sites for all of 2007. Similar to the retail division, new sites typically outperform the sites that are closed or where fuel supply is discontinued.
Second Quarter Financial Highlights
Merchandise sales from Susser's retail convenience stores totaled $105.9 million during the second quarter of 2007, an increase of 11.8 percent overall and 6.4 percent on a same-store basis. This sales growth was led by strong performance from the Laredo Taco Company restaurants, beer and snacks, and the impact of an increase in the cigarette excise tax in Texas. Total merchandise gross profit increased 8.4 percent to $34.0 million. Net merchandise margin was 32.1 percent -- down from 33.2 percent a year ago -- primarily reflecting the impact of the $1-per-pack cigarette tax increase.
Retail convenience store fuel volumes increased 5.5 percent to 106.6 million gallons for the quarter. This increase reflects a 3.2 percent increase in average gallons sold per site, along with the opening of 12 new retail stores in the second half of 2006 and seven in the first half of 2007. Retail fuel gross margins increased 12.1 percent to 17.2 cents per gallon, versus 15.4 cents per gallon in the second quarter of 2006, resulting in an 18.2 percent increase in retail fuel gross profit to $18.4 million.
Wholesale fuel volumes sold to Susser's 374 dealers and other third-party customers increased 0.7 percent to 118.7 million gallons in the quarter. Wholesale fuel gross margin was 5.3 cents per gallon, versus 5.9 cents per gallon a year ago, and wholesale fuel gross profit decreased 9.3 percent to $6.3 million. The lower margins partly reflect a mix change resulting from the June 2006 sale of 25 unattended units, which produced higher margins than the average wholesale business, along with lower margins on dealer consignment gallons.
For the first six months of 2007, Susser reported that its merchandise sales increased by 10.4 percent from the year-earlier first half to $199.3 million. Adjusted EBITDA(1) increased by 16.6 percent to $24.5 million. Net income totaled $3.9 million, or $0.23 per diluted share, versus a net loss of $0.2 million, or a loss of $0.02 per diluted share, in the first half of 2006. Total revenues increased by 4.2 percent from a year ago to $1.22 billion.
2007 Guidance Updated
The Company is raising its merchandise same-store sales guidance and is reaffirming its other existing 2007 guidance range as follows:
2007 Guidance 2007 First Half Performance Merchandise Same-Store Sales 4.5%-6.5% 5.7% Growth (previously 4%-5%) Merchandise Margin, net of shortage 31-33% 32.1% Retail Average Per-Store Gallons Growth 2-6% 0.4% Retail Fuel Margins 12-15 cents/gallon 14.6 cents Wholesale Fuel Margins 4.0-5.5 cents/gallon 4.6 cents New Retail Stores* 18-22 7 New Wholesale Dealer Sites* 25-35 12 * Does not reflect store closures, which are typically much lower volume locations than new sites. (1) Adjusted EBITDA is a non-GAAP financial measure of performance and liquidity that has limitations and should not be considered as a substitute for net income or cash provided by (used in) operating activities. Please refer to the discussion and tables under "Reconciliations of Non-GAAP Measures" at the end of this news release for a discussion of our use of adjusted EBITDA and a reconciliation to net income and cash provided by operating activities for the periods presented.
Investor Conference Call and Webcast
Susser's management team will hold a conference call on Thursday, August 16, 2007, at 11 a.m. ET (10 a.m. CT) to discuss second quarter results. To participate in the call, dial (303) 262-2130 at least 10 minutes before the call begins and ask for the Susser conference call. A replay will be available approximately two hours after the call ends and will be accessible through August 23. To access the replay, dial (303) 590-3000 and enter the pass code 11094426#.
The conference call will also be accessible via Susser's Web site at http://www.susser.com. To listen to the live call, please visit the Investor Relations page of Susser's Web site at least 10 minutes early to register and download any necessary software. An archive will be available shortly after the call for approximately 60 days.
About Susser Holdings Corporation
Corpus Christi, Texas-based Susser Holdings Corporation is a third generation family led business that operates 330 convenience stores in Texas and Oklahoma under the Stripes banner and supplies branded motor fuel to over 370 independent dealers through its wholesale fuel division. Susser owns and operates over 150 Laredo Taco Company restaurants inside the Stripes convenience stores that feature authentic "made from scratch" Mexican food.
This news release contains "forward-looking statements" describing Susser's objectives, targets, plans, strategies, costs, anticipated capital expenditures, expected cost savings, costs of our store re-branding initiatives, expansion of our food service offerings, potential acquisitions and new store openings and dealer locations. These statements are based on current plans and expectations and involve a number of risks and uncertainties that could cause actual results and events to vary materially, including but not limited to: competition from other convenience stores, gasoline stations, supermarkets, hypermarkets and other wholesale fuel distributors; changes in economic conditions; volatility in energy prices; political conditions in key crude oil producing regions; wholesale cost increases of tobacco products; adverse publicity concerning food quality, food safety or other health concerns related to our restaurant facilities; consumer behavior, travel and tourism trends; devaluation of the Mexican peso or restrictions on access of Mexican citizens to the U.S.; unfavorable weather conditions; changes in state and federal regulations; dependence on one principal supplier for merchandise, two principal suppliers for gasoline and one principal provider for transportation of substantially all of our motor fuel; financial leverage and debt covenants; changes in debt ratings; inability to identify, acquire and integrate new stores; dependence on senior management; acts of war and terrorism; and other unforeseen factors. For a full discussion of these and other risks and uncertainties, refer to the "Risk Factors" section of the Company's annual report on Form 10-K for the year ended December 31, 2006. These forward-looking statements are based on and include our estimates as of the date hereof. Subsequent events and market developments could cause our estimates to change. While we may elect to update these forward-looking statements at some point in the future, we specifically disclaim any obligation to do so, even if new information becomes available, except as may be required by applicable law.
Contacts: Susser Holdings Corporation Mary Sullivan, Chief Financial Officer (361) 693-3743, email@example.com DRG&E Ken Dennard, Managing Partner (713) 529-6600, firstname.lastname@example.org Anne Pearson, Senior Vice President (210) 408-6321, email@example.com Financial statements follow Susser Holdings Corporation Consolidated Statements of Operations Unaudited Three Months Ended Six Months Ended July 2, July 1, July 2, July 1, 2006 2007 2006 2007 (dollars in thousands, except per share amounts) Revenues: Merchandise sales $94,713 $105,925 $180,512 $199,290 Motor fuel sales 548,477 580,580 980,053 1,009,695 Other income 5,968 6,290 11,904 12,460 Total revenues 649,158 692,795 1,172,469 1,221,445 Cost of sales: Merchandise 63,296 71,882 120,965 135,287 Motor fuel 525,969 555,891 942,816 968,617 Other 212 459 333 583 Total cost of sales 589,477 628,232 1,064,114 1,104,487 Gross profit 59,681 64,563 108,355 116,958 Operating expenses: Personnel 17,637 19,649 34,358 37,903 General and administrative 4,928 6,023 9,416 12,248 Other operating 16,463 16,762 31,212 31,452 Rent 5,527 6,106 11,084 12,120 Royalties 971 - 1,851 66 Gain on disposal of assets and impairment charge (273) (207) (277) (192) Depreciation, amortization, and accretion 5,913 6,983 11,558 13,485 Total operating expenses 51,166 55,316 99,202 107,082 Income from operations 8,515 9,247 9,153 9,876 Other income (expense): Interest expense (4,671) (2,927) (9,418) (5,786) Other miscellaneous (70) 91 111 196 Total other income (expense) (4,741) (2,836) (9,307) (5,590) Minority interest in income (loss) of consolidated subsidiaries (14) (17) (33) (33) Net income (loss) before income taxes $3,760 $6,394 $(187) $4,253 Income tax expense - (120) - (380) Net income (loss) $3,760 $6,274 $(187) $3,873 Net income (loss) per share: Basic $0.41 $0.38 $(0.02) $0.23 Diluted $0.40 $0.37 $(0.02) $0.23 Weighted average shares outstanding: Basic 9,230,404 16,705,404 9,230,404 16,705,404 Diluted 9,293,964 16,766,204 9,230,404 16,769,925 Susser Holdings Corporation Consolidated Balance Sheets December 31, July 1, 2006 2007 audited unaudited Assets (in thousands) Current assets: Cash and cash equivalents $32,938 $19,550 Accounts receivable, net of allowance for doubtful accounts of $1,179 at December 31, 2006 and $1,048 at July 1, 2007 44,084 54,554 Inventories, net 37,296 43,205 Assets held for sale 518 518 Other current assets 1,884 2,383 Total current assets 116,720 120,210 Property and equipment, net 232,454 249,640 Other assets: Goodwill 44,762 44,762 Intangible assets, net 17,492 16,061 Other noncurrent assets 10,899 11,457 Total other assets 73,153 72,280 Total assets $422,327 $442,130 Liabilities and shareholders' equity Current liabilities: Accounts payable $84,838 $98,676 Accrued expenses and other current liabilities 20,711 21,188 Total current liabilities 105,549 119,864 Long-term debt 120,000 120,000 Deferred gain, long-term portion 27,060 26,373 Other noncurrent liabilities 7,918 8,833 Total long-term liabilities 154,978 155,206 Minority interests in consolidated subsidiaries 630 658 Commitments and contingencies Shareholders' equity: Common stock, $.01 par value, 125,000,000 shares authorized, 16,824,162 issued and outstanding as of December 31, 2006, 16,831,662 issued and outstanding as of July 1, 2007 168 168 Additional paid-in capital 166,398 167,757 Retained earnings (deficit) (5,396) (1,523) Total shareholders' equity 161,170 166,402 Total liabilities and shareholders' equity $422,327 $442,130
Reconciliations of Non-GAAP Measures to GAAP Measures
We define EBITDA as net income before net interest expense, income taxes and depreciation, amortization and accretion. Adjusted EBITDA further adjusts EBITDA by excluding cumulative effect of changes in accounting principles, discontinued operations, non-cash stock-based compensation expense and certain other operating expenses that are reflected in our net income that we do not believe are indicative of our ongoing core operations, such as significant non-recurring transaction expenses and the gain or loss on disposal of assets and impairment charges. Adjusted EBITDAR adds back rent to adjusted EBITDA. In addition, those expenses that we have excluded from our presentation of adjusted EBITDA and adjusted EBITDAR (along with our royalty expenses, marketing expenses, management fees and other items) are also excluded in measuring our covenants under our revolving credit facility and the indenture governing our senior notes.
We believe that adjusted EBITDA and adjusted EBITDAR are useful to investors in evaluating our operating performance because:
-- they are used as a performance and liquidity measure under our subsidiaries' revolving credit facility and the indenture governing our senior notes, including for purposes of determining whether they have satisfied certain financial performance maintenance covenants and our ability to borrow additional indebtedness and pay dividends; -- securities analysts and other interested parties use them as a measure of financial performance and debt service capabilities; -- they facilitate management's ability to measure operating performance of our business because they assist us in comparing our operating performance on a consistent basis since they remove the impact of items not directly resulting from our retail convenience stores and wholesale motor fuel distribution operations; -- they are used by our management for internal planning purposes, including aspects of our consolidated operating budget, capital expenditures, as well as for segment and individual site operating targets; and -- they are used by our board of directors and management for determining certain management compensation targets and thresholds.
EBITDA, adjusted EBITDA and adjusted EBITDAR are not recognized terms under GAAP and do not purport to be an alternative to net income as a measure of operating performance or to cash flows from operating activities as a measure of liquidity. EBITDA, adjusted EBITDA and adjusted EBITDAR have limitations as analytical tools, and you should not consider them in isolation or as a substitute for analysis of our results as reported under GAAP. Some of these limitations include:
-- they do not reflect our cash expenditures, or future requirements, for capital expenditures or contractual commitments; -- they do not reflect changes in, or cash requirements for, working capital; -- they do not reflect significant interest expense, or the cash requirements necessary to service interest or principal payments on our revolving credit facility or senior notes; -- they do not reflect payments made or future requirements for income taxes; -- although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and EBITDA, adjusted EBITDA and adjusted EBITDAR do not reflect cash requirements for such replacements; and -- because not all companies use identical calculations, our presentation of EBITDA, adjusted EBITDA and adjusted EBITDAR may not be comparable to similarly titled measures of other companies.
The following table presents a reconciliation of net income to EBITDA, adjusted EBITDA and adjusted EBITDAR:
Three Months Ended Six Months Ended July 2, July 1, July 2, July 1, 2006 2007 2006 2007 (in thousands) Net income $3,760 $6,274 $(187) $3,873 Depreciation, amortization, and accretion 5,913 6,983 11,558 13,485 Interest expense, net 4,671 2,927 9,418 5,786 Income tax expense - 120 - 380 EBITDA $14,344 $16,304 $20,789 $23,524 Non-cash stock based compensation 113 684 226 1,359 Management fee 175 - 373 - Gain on disposal of assets (273) (207) (277) (192) Other miscellaneous 70 (91) (111) (196) Adjusted EBITDA $14,429 $16,690 $21,000 $24,495 Rent expense 5,527 6,106 11,084 12,120 Adjusted EBITDAR $19,956 $22,796 $32,084 $36,615
The following table presents a reconciliation of net cash provided by operating activities to EBITDA, adjusted EBITDA and adjusted EBITDAR:
Six Months Ended July 2, July 1, 2006 2007 (in thousands) Net cash provided by operating activities $17,372 $16,034 Changes in operating assets & liabilities (6,094) 2,519 Gain on disposal of assets 277 192 Non-cash stock based compensation expense (226) (1,359) Minority interest (26) (28) Fair market value in nonqualifying derivatives 68 - Income taxes - 380 Interest expense, net 9,418 5,786 EBITDA $20,789 $23,524 Non-cash stock based compensation 226 1,359 Management fee 373 - Gain on disposal of assets (277) (192) Other miscellaneous (111) (196) Adjusted EBITDA $21,000 $24,495 Rent expense 11,084 12,120 Adjusted EBITDAR $32,084 $36,615 SUSS-IR
SOURCE Susser Holdings Corporation
Mary Sullivan, Chief Financial Officer of Susser Holdings Corporation, +1-361-693-3743, firstname.lastname@example.org; or Ken Dennard, Managing Partner, +1-713-529-6600, email@example.com, or Anne Pearson, Senior Vice President, +1-210-408-6321, firstname.lastname@example.org, both of DRG&E for Susser Holdings Corporation
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